Performance summary: On April 30, 2024, the company released its report for the first quarter of 2024. With 2024Q1, the company achieved operating income of 60 billion yuan, up 110.7% year on year and 4.8% month on month; realized net profit of 100 million yuan, up 224.8% year on year, up 23.9% month on month; realized net profit without return to mother of 100 million yuan, up 226.7% year on year, and 32.8% month on month.
Outstanding performance, maintaining high R&D investment. Previously, the company released its 2023 annual report: 1) Revenue side: The company achieved revenue of 1.78 billion yuan, an increase of 36.9% over the previous year. Among them, mobile device power supply/universal charging management chips/adapter power management chips/automotive electronic chips achieved revenue of 13.8/2.0/ 1.6/0.3 billion yuan respectively, up 38.5%/2.1%/88.5%/89.0% year-on-year respectively. 2) Profit side: The company achieved net profit of 260 million yuan, up 6.2% year on year; the company's gross margin/net margin was 42.3%/14.7%, respectively, down 0.7 pp/4.2 pp year on year. 3) Cost side: The company's sales/management/R&D expenses rates were 4.4%/8.6%/16.4%, respectively, up 0.1 pp/ 2.3 pp/2.1pp year on year, respectively. Among them, the absolute value of the company's R&D expenses in 2023 was 290 million yuan, an increase of 57.0% year on year.
Mobile phones continue to enrich the charging link product line, and it is expected that the value of stand-alone devices will continue to increase. Driven by application scenarios, the company improved the product layout in the overall smartphone charging link, and gradually expanded the layout of mobile phone products from charge pumps to charge pumps, chargers, lithium battery protection, wireless charging, and AMOLED power supply chips. The company uses wired charging chips to reach deep partnerships with mainstream domestic mobile phone manufacturers, and is actively promoting the introduction of other product lines in the mobile phone field, which is expected to increase the stand-alone value of the company's products in mobile phones to 20 yuan+.
Automotive electronics are growing rapidly, and the industrial sector is expected to open up new fields. In 2023, the company's automotive electronics business revenue increased 89.0% year on year. With rapid iteration and continuous innovation capabilities, the company's automotive electronics business revenue increased 89.0% year-on-year. With rapid iteration and continuous innovation capabilities, the company planned layout in the fields of automotive instruments, smart cockpits, ADAS and BMS: In 2023, USB and wireless charging solutions achieved large-scale mass production on clients; new products such as high-performance DC-DC power chips, HSD chips, and e-Fuse chips were delivered on a client-side scale, and some customers have already entered the targeted design stage of the project. In the industrial sector, the company continues to diversify product categories, plans to achieve an end-to-end product layout in the industrial field, and has achieved certain results in the fields of energy storage, drones, power tools, communications, etc., and is expected to be further introduced into industrial power supplies and AI Power in the future.
Profit forecasting and investment advice. It is estimated that in 2024-2026, the company's revenue will be 24.6/32.5/4.09 billion yuan, respectively, and net profit to mother will be 4.2/59/ 8.1 billion yuan, respectively. Considering that the company's main charge pump products are highly integrated, cover the power range, and maintain a high gross profit margin under charge pump competition, the mobile phone product line is expected to greatly improve the stand-alone value chain after being rich, and the company's layout in automotive electronics, we gave the company 45 times PE in 2024, corresponding to a target price of 45.00 yuan for the first time, and gave it a “buy” rating.
Risk warning: Risks such as consumer demand growth falling short of expectations, deterioration of the competitive landscape, and falling short of expectations in new product developments.